A new year and new beginning but first-time house buyers will need £326,000 to get started in Stratford
THE average house price in Stratford is £420,960 that means the cost of buying a house has risen by £27,314 between October 2022 and 2023 making Stratford one of the most expensive places to buy a property in the West Midlands.
A New Year and a new year beginning for many but that won’t be the case for hundreds of first-time buyers who will need to fork out an average £326,084 to get on the property ladder.
According to the Money Saving Expert website’s calculators, a couple buying an average £326,000 Stratford house with a ten per cent deposit (£32,600) and borrowing £293,000 with a repayment mortgage over 25 years, fixed for the first two years at five per cent would need to afford repayments of about £1,700 a month. Assuming an affordability limit of 25 per cent of their joint incomes, they would need to earn jointly £6,800 a month (£81,600 annually).
In 2023 the average weekly wage for women in Stratford district was £671.30 and for men, £766.80. Monthly, those combined figures would return £5,752.40 and £69,028.80 annually so unless the couple had savings, an inheritance or some other income source available they couldn’t afford a house with an average price of ££326,000.
Cllr Susan Juned, leader of Stratford District Council said: “At the moment, even so-called-affordable homes in this area are unaffordable because affordable in legislation is up to 80 per cent of market rate – whether to buy or rent. That is where the district council can assist by working with Housing Associations and communities.
“Also, ensuring homes are built in the right places is crucial to meeting housing need effectively. If a family is based in Alcester, sends their children to a local school and have a local support network, then a house in Stratford or Southam on a developer-led estate where they need a car to access a GP or school, may not be their best option. We have to work with communities and also ensure the soft infrastructure such as schools and GP surgeries, as well as work with providers of public transport.”
Add that to the average cost of a new-build in Stratford where prices have gone through the roof and anyone wanting to purchase a property would need around £599,000 to bag that dream house – according to the UK Land Registry.
While UK house prices continue to rise at the moment there are those in the housing market who predict a possible four to five per cent drop during 2024 but will that apply to Stratford and will the market slow down?
In both cases, Nikki Kennedy – director of Kennedys Stratford Limited – doesn’t think so.
“No, quite the opposite - it is extremely busy just now. It was quiet in the 3rd quarter of 2023 but the 4th quarter and into January have been really busy.
There’s still a huge demand for properties in Stratford. It’s still a very desirable place to live and our excellent schools continue to bring new people to the area.
Housebuilding has helped stimulate the market in some ways. It has encouraged some of our older residents with larger family homes to consider downsizing but the house builders have not built enough affordable first-time buyer properties. Bargains are few and far between in Stratford but there are still one or two out there if you look carefully. For example, we have a fabulous three bedroomed family home with a large garden on the market for only £230,000 and in 2023 the highest property asking price we handled was £950,000,” Nikki Kennedy said.
Having established the housing market in Stratford is different to other areas in the West Midlands is there any good news for home buyers in 2024?
Nikki Kennedy believes there could be: “We expect a mixed year but with mortgage rates continuing to fall, more first-time buyers will have confidence to get onto the property ladder which stimulates the whole market. Up-sizers will have more confidence with the stabilising mortgage rates too so they will hopefully be encouraged to make their next moves.”
Peter Vaughan, director at Vaughan Reynolds, looks forward to a resurgent property market in the New Year.
“When a building goes up in flames, the media reports a fire: what it doesn’t do is report the smoke beforehand. Similarly, no one at the moment is headlining the marked increase in property activity witnessed by estate agents in the lead-up to Christmas. In fact, far from a seasonal slowdown, there were more viewings in each month of November and December than in September. There is no smoke without fire, and with this pickup in activity, declining inflation and the likelihood of some falling mortgage interest rates through 2024, we can look forward to an improving property market in the coming months. No doubt also, both Conservative and Labour parties will try to lure the electorate with new housing policies designed to stimulate the property market further.
Nor is this optimism based solely on the above. 2023 saw increased interest from first-time buyers. This trend should continue as we enter a more buoyant market that also stimulates second movers, thus making more first-time buyer properties available. This would be the long-wished-for virtuous circle.
Most baby boomers and millennials consider property as part-home and part-investment vehicle. For them property has been the gift that has kept on giving. But let’s look at the property market from the eyes of twenty-year-olds. For them the last decade has been challenging. This group, often priced out of home ownership and suffering increasingly high rents, says they aren’t looking for investment opportunities they’re simply looking for somewhere to lay their heads. Out of the mouths of babes, Generation Z reminds us that first and foremost a home is to live in.
Nor should we forget the role the older generation is playing in this residential resurgence. Baby Boomers might not be moving much themselves at the moment but in 2023 the Bank of Mum and Dad and the Bank of Grandma and Grandpa invested over £8 billion in property: that’s not personal investment but an investment in the futures of their children and grandchildren.
The news in the last week has been encouraging. Building societies and banks have reduced their rates of borrowing and two-year fixed mortgages can be arranged at around 5.35 per cent, providing a much-needed reduction in monthly mortgage payments.
2024 should be a year of looking forward and growing opportunity. Above all it should be a time when property is purchased, but mostly to live in than to trade in. Now that should give the media a blazingly good headline.”
There’s a sense of optimism for some but a lot depends on what happens in the second half of the year with a general election on the horizon but how clear is the forecast for a brighter tomorrow?
Michael Hawkins, partner at Peter Clarke said:
“There’s positivity out there – the property market is like a barometer. Sales were very good in the run-up to Christmas and the New Year has started well so it looks positive for the first half of the year but the second half might be different if there’s a general election. What we are seeing is people are fed-up standing still, they want a roof over their heads and don’t necessarily want to be living in limbo and want their own property so the demand is definitely out there 12 months a year. We are very lucky in Stratford with its amenities. It’s good quality family houses that people want but we still need more new builds. Last year was very good for us. We had a number of instructions worth £3 million and several plots of land circa £1.5 million – there’s constant demand for good quality single building plots. If interest rates go down it builds more confidence in the market and encourages more buyers. Stratford is positive, confident and a great place to live.”
Warwickshire Rural Housing Association here
Cllr Liz Coles, housing and customer services portfolio at Stratford District Council said: ”We are aware of the need for more social housing especially for single occupancy units for both young and old people. There is a shortage of single units throughout the district. One of our priorities is to work with partners and see how we can facilitate the creation of housing to meet this need.”
Housing experts will point out that Stratford is a highly desirable place to live, steeped in history, a major visitor attraction, home to William Shakespeare, has an excellent education structure and is just a few miles from glorious south Warwickshire countryside but the figures speak for themselves and Stratford’s average house price tag is six per cent higher than elsewhere with the national picture showing a decrease in prices of minus one per cent and West Midlands 0.3 per cent down as well.
If Stratford is currently considered one of the most expensive places to buy it’s eclipsed by a near neighbour where an escape to the country will cost £516,434 for a home in the Cotswolds. Meanwhile the average house price in Warwick is £362,202.